TSP Talk Blog

01/27/12

Stocks open higher yesterday but for the first time in a while, we saw the indices weaken as the day wore on. Profit taking seems reasonable after the relentless rally. The Dow lost 22-points on the day.


For the TSP, the C-fund fell 0.57% yesterday, the S-fund lost 0.44%, the I-fund was up 0.70%, and the F-fund (bonds) was up 0.34%.

You can see the short-term trend is still very much intact and those who are on the sidelines can't do much more than sit and wait. Chasing at this point is not the greatest idea, but there may be enough people waiting for a pullback to keep adding fuel to this rally. Every person on the sidelines is a potential buyer of any dip.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The leading Dow Transportation Index made another new intraday high yesterday, which is a good sign for the followers like the S&P 500, but you can see that it had trouble closing above 5300 again, and yesterday's reversal day is usually a prelude to a little downside action.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

As the seasonally bullish January winds down, we have the less than exciting month of February on deck.



The 61 year average return in February is 0%. Not the worst, but it's in the bottom 3 months of the year historically.


Chart provided courtesy of www.sentimentrader.com

The TSP Talk Sentiment Survey came in at 47% bulls, 43% bears, for a bulls to bears ratio of 1.09 to 1. That is bearish enough to be another fresh buy signal in a bull market which means the system will remain 100% S Fund for next week.

A quick check of the wild 10-year T-note shows that the yield is back below 2% and the moving averages. I'm still believe that this has to move above 2% for me to fully embrace the current stock market rally.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Technically the stock market looks very good, but these low yields seem like a piece of a puzzle that is missing for this bull market.

Thanks for reading! Have a great weekend!

Tom Crowley


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